On the surface, it might look like good news – 1) the unemployment rate fell from 8.3% to 8.1% in August; and 2) the number of unemployed fell by 250,000.  However, a careful review of the data shows that the economy is rather lifeless.

Much of the improvement was due to a decrease in the civilian labor force, which fell by 368,000 workers and the number of employed workers fell by 119,000.  In other words, most of improvement in the unemployment rate decline was due to workers leaving the workforce.  In fact, in just the last year alone, the civilian labor force declined by 2,723,000.  If we were to include this one-year loss of workers back into the labor force, the unemployment rate would be at 9.9%.  If we go further back to the end of the recession (June 2009) and included these would-be workers, the unemployment rate would be 11.2%.

Just taking the current figure at face value, this month’s labor report is 44th consecutive month with the unemployment rate above 8%.   Also troubling is the fact that revisions in the data show worse results than previously reported.  For example, the June jobs count fell by 60% when revised this month.  In addition, there are reports of increased social security and disability claims, and suggestions that workers are giving up and trying to get these government transfer payments instead of employment.  In June, for every job added, there were four more enrolled in food stamps.  Even more disheartening is the fact that the numbers may be artificially high, with 10% of the job increase due to an end of a utility work strike … hardly new jobs.

Among the major worker groups, the unemployment rates for teenagers, blacks and Hispanics were 24.6, 14.1 and 10.2 percent, respectively.  For the month, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million.  These individuals accounted for 40.0%of the unemployed.  In August, 2.6 million persons were marginally attached to the labor force and are not counted among the unemployed because they had not searched for work in the preceding 4 weeks.

The economy appeared to improve, but a closer look at the numbers shows an economy with a dismal job market with the lowest workforce participation rate in over 30 years.  It has been three years since the end of the recession and the immediate outlook does not seem rosy.

Steve Pociask is president of the American Consumer Institute Center for Citizen Research.